Debt

9 Months Ended

Sep. 30, 2019

Debt

Short-term Borrowings

The following table presents the composition of our short-term borrowings portfolio.



	September 30, 2019						December 31, 2018
($ in millions)	Unsecured		Secured (a)		Total		Unsecured		Secured (a)		Total
Demand notes	$	2,501	$	—	$	2,501	$	2,477	$	—	$	2,477
Federal Home Loan Bank	—		2,375		2,375		—		6,825		6,825
Securities sold under agreements to repurchase	—		459		459		—		685		685
Total short-term borrowings	$	2,501	$	2,834	$	5,335	$	2,477	$	7,510	$	9,987


(a)	Refer to the section below titled Long-term Debt for further details on assets restricted as collateral for payment of the related debt.

We periodically enter into term repurchase agreements—short-term borrowing agreements in which we sell securities to one or more investors while simultaneously committing to repurchase them at a specified future date, at the stated price plus accrued interest. As of September 30, 2019, the securities sold under agreements to repurchase consisted of $459 million of agency mortgage-backed residential debt securities set to mature as follows: $145 million within 30 days, $170 million within 31 to 60 days, and $144 million within 61 to 90 days. Refer to Note 6 and Note 20 for further details.

The primary risk associated with these repurchase agreements is that the counterparty will be unable to perform under the terms of the contract. As the borrower, we are exposed to the excess market value of the securities pledged over the amount borrowed. Daily mark-to-market collateral management is designed to limit this risk to the initial margin. However, should a counterparty declare bankruptcy or become insolvent, we may incur additional delays and costs. In some instances, we may place or receive cash collateral with counterparties under collateral arrangements associated with our repurchase agreements. At September 30, 2019, we placed cash collateral totaling $6 million and did not receive cash or noncash collateral. At December 31, 2018, we did not place any collateral, and we received cash collateral totaling $8 million and noncash collateral totaling $4 million.

Long-term Debt

The following table presents the composition of our long-term debt portfolio.



	September 30, 2019						December 31, 2018
($ in millions)	Unsecured		Secured		Total		Unsecured		Secured		Total
Long-term debt (a)
Due within one year	$	3,044	$	6,876	$	9,920	$	1,663	$	7,313	$	8,976
Due after one year	9,049		16,761		25,810		10,444		24,773		35,217
Total long-term debt (b) (c)	$	12,093	$	23,637	$	35,730	$	12,107	$	32,086	$	44,193


(a)	Includes basis adjustments related to the application of hedge accounting.


(b)	Includes $2.6 billion of trust preferred securities at both September 30, 2019, and December 31, 2018.


(c)	Includes advances net of hedge basis adjustment from the FHLB of Pittsburgh of $14.0 billion and $14.9 billion at September 30, 2019, and December 31, 2018, respectively.

The following table presents the scheduled remaining maturity of long-term debt at September 30, 2019, assuming no early redemptions will occur. The amounts below include adjustments to the carrying value resulting from the application of hedge accounting. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.



($ in millions)	2019			2020			2021			2022			2023			2024 and thereafter			Total
Unsecured
Long-term debt	$	834		$	2,258		$	699		$	1,095		$	15		$	8,303		$	13,204
Original issue discount	(11		)	(43		)	(48		)	(52		)	(59		)	(898		)	(1,111		)
Total unsecured	823			2,215			651			1,043			(44		)	7,405			12,093
Secured
Long-term debt	1,486			6,695			9,342			5,417			539			158			23,637
Total long-term debt	$	2,309		$	8,910		$	9,993		$	6,460		$	495		$	7,563		$	35,730

The following summarizes assets restricted as collateral for the payment of the related debt obligation, primarily arising from securitization transactions accounted for as secured borrowings and repurchase agreements.



	September 30, 2019					December 31, 2018
($ in millions)	Total (a)			Ally Bank		Total (a)			Ally Bank
Investment securities (b)	$	3,386		$	3,386	$	10,280		$	9,564
Mortgage assets held-for-investment and lending receivables	16,820			16,820		16,498			16,498
Consumer automotive finance receivables	12,130			9,516		17,015			9,715
Commercial automotive finance receivables	13,759			13,759		15,563			15,563
Operating leases	67			—		170			—
Total assets restricted as collateral (c) (d)	$	46,162		$	43,481	$	59,526		$	51,340
Secured debt	$	26,471	(e)	$	24,138	$	39,596	(e)	$	32,072


(a)	Ally Bank is a component of the total column.


(b)	A portion of the restricted investment securities at September 30, 2019, and December 31, 2018, were restricted under repurchase agreements. Refer to the section above titled Short-term Borrowings for information on the repurchase agreements.

(c)

Ally Bank has an advance agreement with the FHLB, and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling $24.7 billion and $30.8 billion at September 30, 2019, and December 31, 2018, respectively. These assets were composed primarily of consumer mortgage finance receivables and loans and investment securities. Ally Bank has access to the FRB Discount Window and had assets pledged and restricted as collateral to the FRB totaling $2.4 billion at both September 30, 2019, and December 31, 2018. These assets were composed of consumer automotive finance receivables and loans. Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its subsidiaries.


(d)	Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Condensed Consolidated Balance Sheet. Refer to Note 10 for additional information.


(e)	Includes $2.8 billion and $7.5 billion of short-term borrowings at September 30, 2019, and December 31, 2018, respectively.

Trust Preferred Securities

At both September 30, 2019, and December 31, 2018, we had issued and outstanding approximately $2.6 billion in aggregate liquidation preference of 8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series 2 (Series 2 TRUPS). Each Series 2 TRUPS security has a liquidation amount of $25. Distributions are cumulative and are payable until redemption at the applicable coupon rate. Distributions are payable at an annual rate equal to three-month London interbank offered rate plus 5.785% payable quarterly in arrears. Ally has the right to defer payments of interest for a period not exceeding 20 consecutive quarters. The Series 2 TRUPS have no stated maturity date, but must be redeemed upon the redemption or maturity of the related debentures (Debentures), which mature on February 15, 2040. Ally at any time may redeem the Series 2 TRUPS at a redemption price equal to 100% of the principal amount being redeemed, plus accrued and unpaid interest through the date of redemption. The Series 2 TRUPS are generally nonvoting, other than with respect to certain limited matters. During any period in which any Series 2 TRUPS remain outstanding but in which distributions on the Series 2 TRUPS have not been fully paid, none of Ally or its subsidiaries will be permitted to (i) declare or pay dividends on, make any distributions with respect to, or redeem, purchase, acquire or otherwise make a liquidation payment with respect to, any of Ally’s capital stock or make any guarantee payment with respect thereto; or (ii) make any payments of principal, interest, or premium on, or repay, repurchase or redeem, any debt securities or guarantees that rank on a parity with or junior in interest to the Debentures with certain specified exceptions in each case. The Series 2 TRUPS were issued prior to October 4, 2010, under the Emergency Economic Stabilization Act of 2008 and are not subject to phase-out from additional Tier 1 capital into Tier 2 capital. The amount of Series 2 TRUPS included in Ally’s Tier 1 capital was $2.5 billion at September 30, 2019. The amount represents the carrying amount of the Series 2 TRUPS less our common stock investment in the trust.

Funding Facilities

We utilize both committed secured credit facilities and other collateralized funding vehicles. The debt outstanding under our various funding facilities is included on our Condensed Consolidated Balance Sheet.

The total capacity in our credit facilities is provided by banks through private transactions. The facilities can be revolving in nature, generally having an original tenor ranging from 364 days to two years, and allow for additional funding during the commitment period, or they can be amortizing and not allow for any further funding after the commitment period. At September 30, 2019, all of our $2.7 billion of capacity was revolving and of this balance, $1.7 billion was from facilities with a remaining tenor greater than 364 days.

Committed Secured Credit Facilities



	Outstanding				Unused capacity (a)				Total capacity
($ in millions)	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
Bank funding
Secured	$	—	$	3,500	$	—	$	1,300	$	—	$	4,800
Parent funding
Secured	700		3,165		1,950		635		2,650		3,800
Total committed secured credit facilities	$	700	$	6,665	$	1,950	$	1,935	$	2,650	$	8,600

(a)

Funding from committed secured credit facilities is available on request in the event excess collateral resides in certain facilities or the extent incremental collateral is available and contributed to the facilities.